South African power utility runs out of cash for diesel fuel supplies
Published: Nov 22, 2022 08:21 PM
Cape Town Photo: VCG

Cape Town Photo: VCG

South Africa's government was scrambling on Monday to find money to buy diesel and avoid severe nationwide power cuts, after the country's power utility said it had run out funds for the fuel.

Minister for public enterprises Pravin Gordhan, held an urgent meeting with the board of state-owned energy firm Eskom on Sunday evening amid "serious concerns" over the situation, the ministry said in a statement. 

"The [ministry] is urgently working with National Treasury and Eskom for it to find the money to buy supplies of diesel," the statement read. 

Eskom on Monday said it has run out of funds to replenish diesel reserves for the financial year ending on March 31, 2023, raising the specter of months of severe outages. 

"The little stock we have is being preserved carefully for dire emergencies," spokesman Sikonathi Mantshantsha said.

Scheduled blackouts, have burdened Africa's most industrialized economy for years with Eskom failing to keep pace with demand and maintain its aging coal-power infrastructure.

The outages reached new extremes in 2022, forcing the cash-strapped firm to burn more diesel than it could afford to make up for supply shortages, according to Eskom's Chief Operating Officer Jan Oberholzer. 

"We do not have money to burn diesel anymore," Oberholzer said last week. The company has spent more than 12 billion rand ($690 million) on fuel so far in 2022.

Some municipalities were not paying for the electricity they consumed, adding to the firm's financial woes, he said.

Eskom is struggling under a 400 billion rand debt - half of which the government has pledged to take on.